GLOBAL MARKETS: In line with market expectations, the FOMC kept its federal funds target rate unchanged at 1.00-1.25% and announced that the balance sheet reduction will start next month with a monthly “cap” of $10bn initially. In the accompanying statement, the FOMC left roughly unchanged its economic outlook. At the same time, despite persistently low inflation, the FOMC did not make changes in the wording related to the medium-term inflation outlook. The updated economic projections did not change materially compared to June while, as regards the FOMC’s policy deliberations, committee participants penciled in an additional rate hike by the end of this year and three further hikes in 2018, as before. In reaction to the above, US Treasury yields moved higher with long-dated paper outperforming, while, in FX markets, the USD firmed across the board.

GREECE: Following a request by the Bank of Greece (BoG), the ECB Governing Council approved yesterday an ELA-ceiling for Greek banks of EUR33.6 billion. According to the BoG, the reduction of €0.3 billion in the ceiling reflects an improvement of the liquidity situation of Greek banks, taking into account private sector deposits flows. According to the Hellenic Statistical Authority (ELSTAT), in July 2017 the Overall Turnover Index in Industry recorded an increase of 8.6%YoY (against -7.0%YoY in July 2016).

SOUTH EASTERN EUROPE

CESEE MARKETS: The majority of emerging market assets came under pressure earlier on Thursday in the wake of the FOMC meeting.